2. 1
Introduction 5
Values and Personality 5
Group Financial Highlights 6
Chairman’s Statement 8
Directorate and Management 11
Group Companies Directorate 14
Group Organogram 16
Chief Executive Officer’s Report 19
Capital Adequacy 22
Products and Services 23
Risk and Governance 27
Corporate Social Investment 33
Annual Financial Statements 35
Analysis of Shareholders 75
Notice to Shareholders 76
Form of Proxy 77

3. 2
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4. 3
At African Banking Corporation you can enjoy the full value of world-class banking in Africa. Our teams’ unique local knowledge combined with international
know how forms the basis by which we deliver world-class solutions relevant to our clients’ needs and challenges. Harness Africa’s potential through our banking,
treasury and investment advisory services.

5. Luba
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4

6. 5
Introduction
ABC Holdings Limited is listed on the Botswana and Zimbabwe Stock exchanges and is the holding company of the African Banking Corporation
group of companies which comprise diverse financial services activities in the areas of corporate, international, investment and merchant banking,
leasing finance, asset management, stock broking and treasury services. African Banking Corporation aims to deliver world-class financial solutions
to the sub-Saharan African region.
Despite the adverse conditions in some countries we operate in, the group posted a pleasing set of results with an improvement on all key performance indicators.
The African Banking Corporation brand has continued to strengthen and as an institution we have gained recognition from market players and
regulators alike.
Our strong brand and committed staff have enabled us to weather the volatile conditions and the symbolism of our logo – creative energy, radiance
and unity – inspires us to fulfil our vision of delivering world-class financial solutions to our clients and partners in Africa.
To ensure that we deliver on our brand promise, we continue to recruit staff with global expertise and a thorough knowledge of the people and
cultures we operate in, and to continually train and emphasise development of staff throughout the organisation.
Our core values remain the guiding principles by which we operate and form the basis of our corporate personality.
Values and Personality
Our core values, the result of broad stakeholder consultation, centre on four distinct areas; INTEGRITY, INNOVATION, PASSION and PROFESSIONALISM.
Our INTEGRITY is the result of our being reliable, ethical, credible, trustworthy with a great sense of heritage. Our cast iron ethics form our
unquestionable character and business practice.
Underpinning INNOVATION are the following traits: visionary, dynamic, energetic, challenging and agile. In practical terms, our adoption of this
core value means that we are devoted to driving change by provoking new ideas and always doing things differently.
And we are PASSIONATE because we are inherently people focused, accessible with a personal and customized approach, not forgetting our vital
African energy. In short, we are PASSIONATE because we believe in and love what we do.
Finally, being PROFESSIONAL to us entails being uncompromising, focused, confident and offering world-class products and services. We strive
to be excellent at what we do and are always looking to improve on our performance.
These essential and enduring values are deeply rooted in our organization, underlying our daily actions.
5

7. 6
Income Statement
Net income from lending activities
Other income
Income from associates and joint venture
Total income
Operating expenditure
Net operating income
Loss on discontinuing operations
Exceptional items
Net income before taxation
Taxation
Profit after tax
Minority interest
Attributable profits
Headline Earnings
Balance Sheet
Cash and cash equivalents
Financial assets held for trading
Investments
Investment in associates and joint venture
Loans and advances to customers and acceptances
Other assets and investment property
Property and equipment
Goodwill
Shareholders' equity
Deposits
Repurchase agreements
Other liabilities and acceptances
Preference share liabilities
Shares in issue
Cost to income ratio
Average shareholders funds
Return on average shareholders funds (Headline)
Net asset value per share (cents)
Financial highlights for the year ended 31 December 2005 on a historical cost basis
Closing Exchange rate to the US$
Botswana Pula
Euro
Mozambican Metical
Tanzanian Shilling
Zambian Kwacha
Zimbabwe Dollar
- official
- parallel market
20,353 16,671 9,127 6,569 4,758
27,974 29,899 24,249 31,256 19,372
813 831 3,139 - 715
49,140 47,401 36,515 37,825 24,845
(29,330) (32,869) (27,221) (20,893) (12,670)
19,810 14,532 9,294 16,932 12,175
- - (284) - -
(1,845) (373) (4,541) (3,154) (603)
17,965 14,159 4,469 13,778 11,572
(6,611) (5,571) (4,214) (3,898) (3,744)
11,354 8,588 255 9,880 7,828
198 1,203 612 - (23)
11,552 9,791 867 9,880 7,805
11,751 7,743 4,929 13,034 8,408
37,657 67,414 71,727 42,439 27,624
156,437 128,565 73,300 34,544 20,793
6,340 14,287 7,055 11,432 6,776
6,261 6,692 1,849 - -
120,938 161,449 149,230 101,039 72,910
6,690 14,600 15,565 14,957 -
4,940 7,976 8,782 3,137 1,788
6,261 11,051 11,341 13,741 13,672
345,524 412,034 338,849 221,289 143,563
35,999 43,021 35,867 28,476 32,153
243,198 268,850 218,233 118,149 83,861
13,362 17,399 18,246 3,587 748
32,065 61,864 46,742 52,342 26,801
20,900 20,900 19,761 18,735 -
345,524 412,034 338,849 221,289 143,563
113,449,724 113,449,724 113,449,724 113,449,724 113,449,724
55% 62% 68% 51% 45%
39,510 39,444 32,172 30,315 35,061
30% 20% 15% 43% 24%
31.7 35.6 27.3 25.1 27.1
31-DEC-05 31-DEC-04 31-DEC-03 31-DEC-02 31-DEC-01
US$’000s US$’000s US$’000s US$’000s US$’000s
2005 2004 2003 2002 2001
5.51 4.27 4.43 5.39 7.01
0.85 0.73 0.80 0.95 1.07
24,183.00 20,457.21 23,207.43 24,100.00 23,542.10
1,162.01 1,073.01 1,035.90 992.22 916.00
3,480.52 4,700.00 4,500.00 4,600.00 3,832.00
26,000.00 5,610.00 824.00 55.00 55.00
88,092.00 6,200.00 5,000.00 1,500.00 325.00

8. 7
2000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
2001 2002 2003 2004 2005
YEAR
TOTAL ASSETS
1,006
1,193
1,501
1,759
BWPMILLIONS
1,902
45
40
35
30
25
20
15
10
5
0
2001 2002 2003 2004 2005
YEAR
RETURN ON AVERAGE SHAREHOLDERS FUNDS (HEADLINE)
44
17
PERCENTAGES
30
24
2.0
1.5
1.0
.5
0
2001 2002 2003 2004 2005
YEAR
NET ASSET VALUE PER SHARE
1.9
1.6
1.3
1.5
THEBE
1.6
22

9. Global Environment
Growth in the global economy continued to be driven by the U.S. and
Chinese economies. However, global growth slowed down in 2005 to
4.3% compared to 5.1% recorded in 2004 partly as a result of the
adverse effects of high oil prices.
Africa’s economic performance remained favourable with real growth
estimated at 4.5% (2004: 5.3%). The debt forgiveness initiatives
of the G-8 became the centre-piece of macro-economic events of
the sub-Saharan region in 2005. The general strengthening of the
commodity prices also bolstered the regional economy especially
in Zambia and Tanzania. The improvement was also evident in
falling inflation and relatively stable currencies. Across the whole
region, with the unfortunate exception of Zimbabwe, macroeconomic
indicators exhibited a positive trend and should be sustained in the
future underpinned by strong commodity prices and improving
economic fundamentals.
On the political front the trend is also generally positive. Elections and
the transition in Mozambique, Namibia and Tanzania went smoothly
and in line with constitutional provisions. All the presidents have taken
office and are likely to continue with the positive policies of the previous
governments. The trend of political stability seems well established
and is expected to hold going forward. Once again Zimbabwe is the
odd one out where the political environment particularly in relation to
the rest of the World remains unfavourable.
Botswana
Botswana is often referred to as the miracle economy and continues
to experience high growth rates. Real GDP growth has averaged between
4% and 8% over the past decade. According to estimates Botswana’s
GDP growth will average 3.8% in 2005, with the mining sector being
the main engine for growth.
Inflation trends remained firmly set in the two digit levels in the fourth
quarter of 2005 and closed the year at 11.4%. The main driver for
the high inflation was undoubtedly the 12% devaluation of the local
currency by the government in May 2005 coupled with high international
oil prices, which has seen the cost of imported goods rise.
After remaining unchanged for most of the period in 2004 at 14.00%,
the Bank of Botswana adjusted the bank rate twice during 2005 and
closed the year at 14.5%.
On the financial market front, the Botswana Stock Exchange performed
well in 2005 with the domestic companies index rising by 23% in
Pula terms, but declined by 5% in USD terms. In January 2006, the
Bank of Botswana announced that with effect from 1 March 2006,
only registered commercial and merchant banks will be allowed to
purchase Bank of Botswana Certificates, and this is seen as a positive
catalyst for investing in the capital market.
Despite the continued competition from commercial banks ABC
8

10. 9
Botswana managed to grow its balance sheet by 32% with deposits
from customers being the main driver of the growth. However attributable
profit was 41% below prior year due to thinning margins largely as a
result of most of the funds being invested in low risk but low yielding
Bank of Botswana Certificates. The Bank is well capitalised as evidenced
by a high capital adequacy ratio of 23%.
Mozambique
Mozambique’s firm commitment to sound macroeconomic policies and
implementation of structural reforms supported by considerable foreign
direct investment has resulted in strong economic growth rates. Real
GDP is estimated to have grown by 7.7% in 2005. Notwithstanding
the massive economic growth over the past decade, the level of economic
development is still very low.
The inflation rate increased significantly to 14% as at the end of
December 2005, reversing a trend that had been established in the
first half of the year, where inflation went as low as 2.3% in June
2005. The reversal was largely attributable to the depreciation of the
currency. Over the year the currency depreciated by 28% from 18,889
in December 2004 to 24,183 in December 2005 against the US dollar.
ABC Mozambique posted a pleasing set of results with an improvement
on all key performance indicators. The operation posted after tax profits
of BWP6.7 million on the back of strong net interest and non-funded
income. The balance sheet grew by 54% on the back of increased deposits.
Deposits increased by a commendable 68%. Capital adequacy ratio at
18% comfortably exceeds the 10% prescribed by the Bank of Mozambique.
Tanzania
Tanzania recorded stable macro economic indicators, with inflation
and interest rates showing minimal movements. Elections were held
in the last quarter of the year and passed peacefully in the mainland
but were somewhat marred by pockets of violence in Zanzibar.
ABC Tanzania and TDFL recorded a combined headline loss of BWP1.4
million. The loss is largely attributable to a disproportionate amount of
non-interest earning assets, which were inherited from the predecessor
institutions. As a result, this had an adverse impact on net interest
income. Whilst the balance sheet of ABC Tanzania has now been cleaned
up, the operation is significantly under-capitalised and efforts are now
underway to merge the two institutions resulting in higher level of capital.
Zambia
Zambia recorded a real GDP growth rate of 5.1% in 2005 compared
to the growth rate of 5.4% registered in the 2004. Annual inflation
rate declined to 15.9% at the end of 2005. The main driver for the
lower rate of inflation was the appreciation of the local currency and
lower cost of maize importation in the last quarter of the year. The
Kwacha appreciated by 29.4% from ZMK4 770: USD1 in 2004 to
ZMK3 300: USD1 at end of 2005.
The Country reached HIPC completion point in April 2005. As a result
the Paris club of creditors wrote off 100% of Zambia’s public and
publicly guaranteed debt. In addition the Country qualified for 100%
write off of its debt to ADB, IMF and World Bank. Zambia’s external
debt as at December 2005 is estimated at US$ 4.5 billion (2004:
US$7.1 billion). Under the new G8 initiative a significant balance of
the debt will be written off. As a result of the above the Kwacha is
projected to be stable in 2006.
ABC Zambia returned to profitability and recorded a profit after tax of
BWP 1.5 million against a loss of BWP 2.1 million recorded in 2004.
Profitability was largely driven by non-interest income buoyed by high
foreign exchange trading profits. Coming from a strong performance
in 2004, Microfinance Africa Zambia Limited recorded disappointing
results with attributable loss of BWP132,000 on the back of a high
impairment of loans. The impairment of loans was high due to data quality
issues arising from the implementation of a new loan tracking system.
Zimbabwe
Zimbabwe is currently faced with enormous economic challenges
including an unsustainable fiscal deficit, spiraling inflation rate and
a currency losing value at an accelerating and seemingly unstoppable
rate. Inflation in 2005 peaked at 585.8% in December largely fuelled
by an acute shortage of foreign currency, resulting in extreme shortages
of food, fuel and electricity. Capacity utilisation for most manufacturing
companies was at a bare minimum, a reflection of the prevailing
economic environment. Several policy initiatives have been undertaken
to try to bring some semblance of normalcy to the economy and reign
in the parallel market. Regrettably all these initiatives have come to
nought, the Zimbabwe dollar depreciated from ZWD 6,200: US$1 in
prior year to close the year at ZWD 88,092: US$1. It is now clear that
the authorities need a holistic approach to the country’s problems if
any progress is to be achieved.

11. 10
Despite the harsh macroeconomic environment, the financial sector
has remained remarkably resilient over the year. Although a number
of financial institutions were placed under curatorship in 2004, the
banking system remained robust in 2005. Following the exit of
marginal financial institutions, the sector was dominated by banks
with high capital adequacy ratios, low foreign currency risk and very
short-term maturities of both assets and liabilities to cope with
volatile interest rates.
Not withstanding the difficult operating environment, the Zimbabwe
operations produced sterling results with headline earnings up
34%. The increase is commendable particularly when viewed
against the massive depreciation of the Zimbabwe dollar. The
credit quality has been maintained at high levels as the operation
continued its cautious and selective lending policy. The mark to
market gains on both equities and money market instruments
contributed positively to the bottom line.
Capital adequacy ratios of the Zimbabwe operations are well above
prescribed minimum levels as a result of the group taking a cautious
approach to lending owing to the high default risk in the current
economic environment.
Management
Bekithemba (Beki) Moyo was appointed the Group Chief Financial
Officer in the second half of the year, replacing Mrs. Ruth Credo who
has now assumed the role of Executive Consultant for the Group. Beki
Moyo is a Chartered Accountant and holds a B. Acc (Hons) (UZ) and
an MBA (Manchester). He previously held the position of Group
Treasurer.
Hashmon Matemera was appointed Group Head of Treasury and
Structured Finance during the same period. Hashmon previously held
the position of Group Head Structured Finance. He holds a BSc
Econ.(UZ) and an MSc Econ.(UZ).
Directorate
Subsequent to year-end, Mr. Tom C. Barry resigned from the Board
because of pressures elsewhere in his business. Tom joined the Board
of ABCH at inception and contributed enormously to its formation and
development to date. The Group will miss Tom’s service and we wish
him well in his endeavours.
Strategic Developments
With the exception of ABC Tanzania the levels of capital of the
subsidiaries has improved significantly in 2005. The group is focusing
on improving the capital levels to the internal target of US$8 million
to US$10 million for all our banking subsidiaries. ABC Botswana and
the Zimbabwe subsidiaries are currently the only operations within the
target range, with ABC Mozambique and Zambia projected to be within
this range through profits generated in 2006.
The preference shareholders’ agreement should be terminated by
mutual consent with effect from 30 September 2006, subject to
shareholders’ approval. In terms of the restructuring agreement, which
should be signed shortly, the preference shareholders will convert 30%
of their redeemable preference shares to ordinary equity. Consequently
shareholders’ funds will increase by USD 5.7 million. This should put
the Company in good stead going forward. The balance of 70% will be
redeemed in two equal installments with the final installment being
due and payable by 30 September 2006.
Dividend
Capital requirements have been increased in a number of jurisdictions
that the group operates in. Consequently, the Directors have
recommended that a final dividend for the current year be passed.
With the group’s financial position strengthening, the board would like
to return to paying a dividend in line with the Company’s policy.
Conclusion
ABC Holdings Limited has shown steady progress and the board would
like to congratulate Douglas Munatsi and his team for a pleasing set
of results.
O M Chidawu
Chairman
28 February 2006

12. 11
ABC Holdings Limited - Board of Directors
Chairman Mr O.M. Chidawu
Non-Executive Directors Mr H. Buttery
Mr N. Kudenga
Mr M. J. Mbaakanyi
Mr H. Wasmus
Mr T. S. Mothibatsela (appointed 9 August 2005)
Executive Director Mr D.T. Munatsi (Chief Executive Officer)
Group Management
D.T. Munatsi Chief Executive Officer
F.M. Dzanya Chief Banking Officer
B. Moyo Chief Financial Officer
N. Gapare Head of Human Resources
J.J.I. Machapu Chief Risk Officer
M. de Klerk Group Legal Counsel
H. Matemera Group Head of Treasury and Structured Finance
L.W. Vermeulen Chief Information Officer
Remuneration Committee
Mr H. Buttery
Mr O.M. Chidawu
Audit and Risk Committee
Mr N. Kudenga (Chairman)
Mr M.J. Mbaakanyi
Mr J. Wasmus
Executive Committee
Mr O.M. Chidawu (Chairman)
Mr H. Buttery
Mr F. Dzanya
Mr D. Munatsi
Standing from left: M. de Klerk, J.J.I. Machapu, B. Moyo, F.M. Dzanya Seated: D.T. Munatsi

13. 12
WASMUS, Johannes (Dutch)
Hans Wasmus was born in Holland in 1941. He holds a diploma
in Accountancy from The Netherlands Institute for Chartered
Accountants and a Diploma in Economics. He was employed by
FMO, the Netherlands based development finance institution for
25 years until 2002, initially as regional manager for Africa and
thereafter as CFO. During this period he was seconded to Indebank
Malawi as senior advisor. He is still a senior advisor to FMO and
is a non-executive director of several companies.
CHIDAWU, Oliver M. (Zimbabwean) - Chairman
Oliver Chidawu was born in Zimbabwe in 1954. He is a first generation
entrepreneur who founded and manages the Kuchi Group of
companies that is active in building and electrical contracting. Mr.
Chidawu is a major shareholder in Bitumen Construction Services
and Heritage Insurance Company. He was a founding shareholder
and director of Heritage Investment Bank that merged with First
Merchant Bank in 1997.
BUTTERY, Howard J. (South African)
Howard Buttery was born in South Africa in 1946. In his position
as Chairman of Bell Equipment Limited, a listed South African
company, his current focus is on the strategic alliance development
of 3 international companies namely John Deere (United States),
Liebher (Germany) as well as Hitachi (Japan). He also serves on
a number of boards – firstly as a non-executive director of the
Rogers & Company Limited (Mauritius) and secondly as a non-
executive director on two international management funds (Swiss).
MOTHIBATSELA, Tshipa S. (Botswana)
Tshipa Mothibatsela was born in South Africa in 1948. He holds
a Bachelor of Engineering in Mining from the University of Zambia
and a Masters in Engineering from Pennsylvania State University
in the USA. Tshipa completed a Management Development
Programme with Anglo American Corporation and went on to
establish his own company, TTCS in Botswana. Tshipa is Chief
Executive Officer and Director of Mothibatsela and Associates
Consulting Engineers, a company he founded.

14. 13
MUNATSI, Douglas T. (Zimbabwean) - Chief Executive Officer
Douglas Munatsi was born in Zimbabwe in 1962. He holds an
MBA (Finance) from the USA and a Bachelor’s Degree in Business
Studies from the University of Zimbabwe. He is also an Associate
of the Institute of Bankers of Zimbabwe by examination. Prior to
the establishment of ABCH, he was Managing Director of First
Merchant Bank, Managing Director of Heritage Investment Bank
and an executive with the International Finance Corporation (IFC)
in its regional mission for Southern Africa. IFC is the private arm
sector of the World Bank.
MBAAKANYI, Modiri J. (Botswana)
Modiri Mbaakanyi was born in Botswana in 1946. He is the Executive
Chairman of Tswana Construction and Hemano Investments. He is
the non-Executive Chairman of Sefalana Holdings Limited. He is
a member of a number of prominent Boards including the Institute
of Development Management and the Botswana National Productivity
Centre. He travels extensively on various Botswana Government
assignments. Mr Mbaakanyi holds a Bachelor of Arts degree
(Economics) from the University of Botswana and a Masters of
Science degree (Business Management) from the Arthur D Little
Management Education Institute in Boston, Massachusetts.
KUDENGA, Ngoni (Zimbabwean)
Ngoni Kudenga was born in Zimbabwe in 1952. He is a Chartered
Accountant and holds a Bachelor of Accountancy degree from the
University of Zimbabwe and is a fellow of the Chartered Institute of
Management Accountants. He is a past president of the Institute
of Chartered Accountants. Currently he is the Managing Partner of
BDO Kudenga & Co. Chartered Accountants of Zimbabwe. He serves
on the boards of Bindura Nickel Corporation, Anglo American
Corporation Zimbabwe and several private companies.

15. 14
African Banking Corporation International Limited
Chairman O M Chidawu
M Mbaakanyi
D T Munatsi
F M Dzanya
Registered Address: ABC House, Tholo Office Park, Plot 50669,
Fairground Office Park, Gaborone, Botswana
African Banking Corporation Botswana Limited
Chairman M. Mbaakanyi
D T Munatsi
B Moyo
D Moremi
D Khama
T Mothibatsela
J Kurian
Registered Address: ABC House, Tholo Office Park, Plot 50669,
Fairground Office Park, Gaborone, Botswana
African Banking Corporation Zambia Limited
Chairman C. Chileshe
D T Munatsi
N Kudenga
A Munshi
G Narder
J.W. Thomas
C M Chikwashi
Z C Shaba
C Milupi
B Nundwe
Registered Adress: National Savings & Credit Building, Northend
Cairo Road, Lusaka, Zambia
African Banking Corporation Tanzania Limited
Chairman J. Kipokola
O M Chidawu
M Maajar
R Dave
J Doriya
W Nyachia
D T Munatsi
I Chasosa
Registered Address First Floor Barclays House, Ohio Street,
P.O. Box 31 Dar es Salaam, Tanzania
African Banking Corporation Mozambique SARL
Chairman B. Alfredo
J McGuffog
V Viseu
D T Munatsi
Registered Address No. 999 Avenida Julius Nyerere, Polana Cimento,
Maputo, Mozambique
Tanzania Development Finance Company Limited
Chairman J. Kipokola
N Kudenga
J Doriya
W Nyachia
DT Munatsi
I Chasosa
Registered Address TDFL Building, Ohio St./Upanga Rd,
P O Box 2478, Dar es Salaam, Tanzania

16. 15
African Banking Corporation Zimbabwe Limited
Chairman N. Kudenga
H Brits
F M Dzanya
F R G Read
J Sibanda
Registered Address: ABC House, Mount Pleasant Business Park,
1 Endeavour Crescent, Mount Pleasant, Harare, Zimbabwe
African Banking Corporation Securities Limited
Chairman P. Chigumira
F. Read
B. Sibanda
C. Simatyaba
P. Sithole
Registered Address: ABC House, Mount Pleasant Business Park,
1 Endeavour Crescent, Mount Pleasant, Harare, Zimbabwe
African Banking Corporation Asset Finance Limited
Chairman F. Ziumbe
H. Matemera
J. Mazonde
O. Moyo
Registered Address: ABC House, Mount Pleasant Business Park,
1 Endeavour Crescent, Mount Pleasant, Harare, Zimbabwe
Iroko Financial Products Limited
Chairman D. T. Munatsi
F. Ekam-Dick
U. K. Gujadhur
Y. K. Juwaheer
Registered Address: 10, Frere Felix de Valois Street, Port Louis,
Mauritius
Incorporation Details
ABC Holdings Limited
Registration number: 99/4865
ABC House, Tholo Office Park
Plot 50669
Fairgrounds Office Park
Gaborone
Botswana
Auditors
KPMG Certified Public Accountants
Plot 50364B
Fairgrounds Office Park
Gaborone
Botswana
Share Transfer Secretaries
ABC Transfer & Secretarial Services (Pty) Ltd
ABC House, Tholo Office Park
Plot 50669
Fairgrounds Office Park
Gaborone
Botswana
First Transfer Secretaries (Private) Ltd
13th Floor, Century House
45 Samora Machel Avenue
P O Box 11
Harare
Zimbabwe
ABC Holdings Limited
Company Secretary and Legal Advisor
Armstrongs Attorneys
5th Floor, Barclays House
P O Box 1368
Gaborone
Botswana

17. ABC Holdings Ltd (listed on BSE & ZSE)
Iroko Financial
Products
Tanzania Development
Finance Company Ltd
Microfinance
Zambia Ltd
ABC
Mozambique
ABC
Botswana
ABC
Zambia
ABC
Tanzania
ABC
Zimbabwe
Other ABCH
Subsidiaries
Regulated Banking
Institution
Regulated Financial
Institution • Only significant operating subsidiaries are shown
Group Management - ABC Holdings Ltd
Chief Banking
Officer
Chief Executive Officer
Country
Managing
Directors
Group Head
Treasury and
Structured
Finance
Group Head
Investment
Banking
Chief Financial
Officer
Chief
Information
Officer
Group
Internal
Audit
Group Head
Human
Resources
Chief Risk
Officer
Legal
Council
16

18. ABC
Mozambique
Board Credit
Committee
Management
Committee
Audit
Committee
ABC
Botswana
Board Credit
Committee
Management
Committee
Audit
Committee
ABC
Zambia
Board Credit
Loan Review
Committee
Audit
Committee
ABC
Tanzania
Board Credit
Committee
Management
Committee
Audit
Committee
ABC
Zimbabwe
Board Credit
Committee
Management
Committee
Audit
Committee
Microfinance
Zambia Ltd
Board Credit
Committee
Management
Committee
Audit and Risk
Committee
Executive
Committee
Regional Credit
Committee
Nominations
Committee
ABC Holdings Ltd (Board of Directors)
Remuneration
Committee
Group
Management
Committee
17
Audit
Committee
Management
Committee

19. Ethiopian
serving
platter/Spring
rolls
18

20. Overview
The group’s performance in 2005 showed marked improvement over prior
years with positive trends in all key performance indicators. This strong
performance clearly demonstrates that the group is moving closer to
achieving its vision of becoming a pan-African financial services group.
On a geographical segmental basis, the group’s operations in Zimbabwe
and Mozambique contributed significantly to the group earnings, only
Tanzania recorded a loss in the year ended 31 December 2005.
It is encouraging to note that net interest income now covers 83% of total
operating costs. This was achieved on the back of an improvement in the
net interest income coupled with cost containment as the group has maintained
overall operating costs at prior year levels. The short-term goal of the group
is for net interest income to cover operating costs (The burden).
The group maintained its credit rating awarded by Global Credit
Rating (GCR) Company of A3 and BBB- for short and long term debt
respectively. Furthermore, GCR has placed the group on a positive
outlook reflecting its improved performance and its ability to upscale
lending and obtain critical mass.
Financial performance
Headline earnings increased by 69% from BWP 36.0 million achieved
in prior year to BWP 60.8 million. This translates into headline earnings
per share of 54 thebe, up from 32 thebe recorded in the previous year.
The results are pleasing particularly when viewed against massive
currency depreciation in Zimbabwe. The Zimbabwe dollar depreciated
from ZWD6,200: USD1 in prior year to close the year at ZWD88,092:
USD1. Notwithstanding the adverse currency movement, the Zimbabwe
operation contributed 77%, albeit down from 97% in prior year.
Mozambique and Botswana contributed 11% and 8% respectively.
Zambia operations contributed BWP1.4 million in 2005 compared to
BWP678 thousand posted in 2004. The Tanzania operations continue
to be a challenge for the group and posted a loss of BWP 1.4 million.
Attributable earnings for the group at BWP 57.7 million comfortably
exceed BWP 45.5 million achieved in prior year.
Return on equity increased by 3 percentage points from 29% to 32%.
Net asset value per share also increased from BWP 1.52 in 2004 to
BWP 1.62 during the period under review.
It is also pleasing to note that cost to income ratio at 56% is
lower than 62% recorded in the prior year. While showing a
positive trend, it is still higher than the short to medium term
group target of 50%.
The group’s results have been driven by impressive growth in
both funded and non-funded income. Net interest income
increased from BWP103 million to BWP126 million on the back
of good margins particularly in Zimbabwe and an 11% increase
in interest earning assets.
19

21. 20
Other income increased from BWP139 million to BWP145 million,
with the major contributor being the mark to market gains arising from
financial assets held for trading. In addition, strong foreign currency
trading income was recorded in Mozambique and Zambia thereby
contributing significantly to other income.
Impairment of loans and advances amounted to BWP20.7 million
compared to BWP25.6 million recorded in the prior year. Despite
this reduction, the impairment charge still remains high and this
is a major cause for concern. Good progress made during the year
to improve the quality of the loan book was negated by provisions
in the micro finance operation. The charge was unusually high due
to data quality issues arising from the implementation of a new loan
tracking system. This level of impairments is not expected to recur.
The operation contributed 35% to the overall provision.
Operating expenditure throughout the group has been kept in check
happily resulting in a slight reduction from BWP153 million to BWP152
million. Operating expenditure for the year under review includes
retrenchment costs of BWP3.6 million. As expected employee costs
continue to be the single biggest expense accounting for 58% of the
group’s total costs up from 51% in 2004.
The group’s effective tax rate declined slightly to 37% from 39% in
prior year. The rate remains high due to losses in operations for which
there is no tax relief. Over time this rate should come down to around
the 30% mark.
Total assets grew by 8% from BWP1 759 million to BWP1 902 million
at the end of 2005. Significant growth was recorded in financial
assets held for trading, which increased from BWP549 million to
BWP861 million. Loans and advances remained static at BWP662
million and this is a reflection of management’s strategy of selective
lending across the group. The change in asset mix is also reflective
of the macroeconomic environment in Zimbabwe where the balance
sheet is skewed towards low risk money and equity market
instruments. Deposits from customers increased from BWP1 148
million to BWP1 339 million with the highest increase being
recorded in Botswana.
Following successive losses in Tanzania, a decision was taken to write
off the entire goodwill valued at BWP 16 million in respect of ABC
Tanzania. In addition discussions to exit Iroko are at an advanced stage
and Iroko has therefore been classified under assets available for sale,
which assets have been fully impaired.
The Group balance sheet remains strong with Shareholders’ Equity,
excluding minority interests of BWP 185 million. The massive depreciation
of the Zimbabwe dollar resulted in the foreign currency translation reserve
increasing by BWP48 million. All the licensed subsidiaries are fully
compliant with minimum regulatory capital requirements.
Operational Review
Business Segments
Treasury operations continued to be the mainstay of the group with
increased trading income recorded in Zimbabwe, Zambia and Mozambique.
Mozambique and Zambia benefited from high foreign exchange trading
activities during the year. Improved liquidity across the group enabled
the group to maximize money market trading income. The structured
finance division continues to be innovative and contributed positively
to group profits.
With political and economic stability being firmly established in most
of the group’s operating markets, margins continue to go down with
Botswana and Tanzania being hardest hit. In contrast, Zimbabwe
continues to be perceived as a high-risk area and hence the margins
are generally higher. The volatility in the Zimbabwean money and capital
markets enabled our treasury unit to maximize returns particularly in
the second half of the year.
Despite the reduction in impairment of loans and advances, corporate
and private banking contribution was lower than projected due to
reduced margins in most of the countries we operate in. In addition
the group adopted a cautious lending policy resulting in the book being
maintained at prior year levels. Owing to the above the quality of the
book has improved as evidenced by the reduction in impairment of
loans and advances in the lending portfolio. Efforts will continue in
the coming year to increase the loan book without compromising the
quality of loan assets, thereby keeping the incidence of bad debts at
a manageable level.
The micro finance operation turned a disappointing set of results, with
high impairment of loans being the major contributor to the adverse
performance. The high bad debt charge surfaced after the implementation
of the new loan tracking system, which brought to light a possible
overstatement of debtors. A decision was then taken to impair the
loans but the final position can only be established once the clean up
exercise has been finalized in the first half of 2006. The implementation
of the new loan tracking system will improve the efficiencies in debt
collection and client management in 2006 and beyond.

22. 21
Investment banking division showed good growth in Zambia and
Zimbabwe in both local currency terms and Pula terms. Assets under
management grew by 53% with Botswana and Zimbabwe being the
major contributors.
Support Divisions
Internal audit has continued to play a key role in maintaining and
improving internal controls in the group. The main internal audit
function is based in Zimbabwe and provides internal audit services
across the group. The group internal audit function is further supported
by country internal auditors. The head of internal audit reports directly
to the audit committee and his reports are acted upon by management
throughout the group.
The compliance officers in countries ensure compliance with both
internal procedures and external requirements. All countries have fully
fledged compliance officers who are senior managers with direct access
to the country managing directors and the audit committee chairmen.
The risk management functions of the group are vested in the Group
Risk department headed by the Chief Risk Officer who has direct access
to the Audit and Risk Committee. With the high impairment of loans
advances charged in 2004, credit risk was one of the key areas that
received attention from the risk department during the year ended 31
December 2005. The marked improvement in credit risk reviews and
management of the loan book has borne fruit during the year evidenced
by the reduction in the impairment charge. The department also focused
on management of liquidity risk especially with the continued adverse
economic environment in Zimbabwe.
The MIS system implementation is still in progress and it is seen as
a good ingredient to ensure meaningful and timeous financial reporting
to all stakeholders. Information technology is a bedrock of efficient
management information systems hence the group’s commitment to
continually improve the IT platform for all operating units. During the
year there has been improvements to the service delivery, which in the
past was hampered by the various telecommunications issues.
One of the major ingredients for a successful wholesale Bank is the
quality of its people. As a result the development of human resources
is critical for the group. After the success of the group’s first Graduate
Management Development Program, the second program received
overwhelming response from all countries that we operate in. The
second set of trainees is due to graduate in May 2007.
Future Prospects
A firm foundation has been laid for sustained profitability going forward.
The group’s priority in 2006 will be to consolidate the gains made in
2005 and indeed being recognised as a significant player in our chosen
markets. I am happy to report that with the exception of Tanzania all
legacy issues are now behind us, consequently operations outside
Zimbabwe should register positive balance sheet and profitability
growth. The environment in Zimbabwe will in all probability continue
to be challenging. As a result, Zimbabwe’s contribution is expected to
remain strong but declining as a percentage of the group total earnings.
On an operational level, deposit mobilisation and improving the
capital base for our subsidiaries will continue to be a focus point
for the group in 2006. The marked improvement in key performance
indicators in 2005 should enhance our ability to raise both deposits
and credit lines.
As alluded to above, Tanzania remains a challenge for the group and the
operation has to start making profits without further delay. Whilst the
balance sheet of ABC Tanzania is now clean, the operation is significantly
under-capitalised, largely due to inherited bad debts written off over the
last couple of years. In this regard the group is working on several initiatives,
which if successful will result in ABCT’s capital increasing to a minimum
of USD 6 million.
The group is committed to income diversification particularly to reduce
Zimbabwe ‘s overall percentage contribution and we believe we are
poised for further consolidation and growth in the coming year.
Acknowledgements
I would like to thank and congratulate management and staff on their
continued commitment and hard work during 2005. Their effort and
the Board’s guidance has enabled the group to deliver good results
and maintain value for shareholders.
D T Munatsi
Chief Executive Officer
28 February 2006

23. 22
225,205 24% 225,205 22%
213,534 22% 148,878 14%
(288,177) -30% (249,686) -24%
150,562 16% 124,397 12%
23,011 26,772
3,018 2,913
1,364 1,084
27,393 3% 30,769 3%
177,955 19% 155,166 15%
2005 2004
ABC Holdings Limited
CAPITAL ADEQUACY OF ABC BANKING OPERATIONS
ABC Zimbabwe Limited
ABC Securities Limited (Zimbabwe)
ABC Asset Finance Limited (Zimbabwe)
ABC Botswana Limited
ABC Mozambique Sarl
ABC Zambia Limited
ABC Tanzania Limited
Capital Adequacy statement as at 31 December 2005
2005 2004 2003 2002 2001
% % % % %
32% 17% 13% 13% 14%
222% 234% 21% 19% 81%
124% 45% 16% 15% 23%
23% 24% 19% 20% 15%
18% 21% 21% 38% 40%
22% 21% 24% 21% 76%
10% 11% 6% 12% 8%
Risk-weighted assets
On balance sheet
0% riskweighting
20% riskweighting
50% risk weighting
100% risk weighting
Off balance sheet
50% risk weighting
100% risk weighting
Total
Consolidated Capital Adequcy of ABC Holdings Limited on a Historical Cost Basis
Assets per Risk-weighted Assets per Risk-weighted
Balance Sheet Assets Balance Sheet Assets
off Balance Sheet off Balance Sheet
BWP'000s BWP'000s BWP'000s BWP'000s
799,003 - 596,289 -
215,709 43,142 253,985 50,797
5,008 2,504 26,960 13,480
853,995 853,995 875,386 875,386
46,738 23,369 35,710 17,855
31,684 31,684 69,627 69,627
1,952,137 954,694 1,857,957 1,027,145
Primary Capital
Share capital and premium
Capital Reserves & Retained Earnings
Impairments (Goodwill & FCTR)
Secondary Capital
Preference share capital
General debt provision (50%)
Available for sale reserves
Total Qualifying Capital
Percentage of Percentage of
Risk-weighted Risk-weighted
BWP'000s assets BWP'000s assets
Qualifying Capital
This statement has been prepared by applying the risk weightings applicable to regulated banks in Botswana, to all group assets, and Basle 1 principles
to capital, in order to derive a consolidated capital adequacy ratio. It is intended as a guideline only .

24. 23
CORPORATE AND INTERNATIONAL BANKING
The Corporate and International Division has highly motivated and
professional staff with a wealth of experience who are able to provide
clients with prompt, advice and personalised service.
The team strives to carefully balance available resources to fulfil
the group’s goal of achieving high capital ratios, liquidity and
strong credit quality. The division offers the following comprehensive
facilities:
• bridging loans
• short term loans
• medium term loans
• cash advances
• off-shore finance (import and export)
• documentary letters of Credit
• guarantees
• asset finance
• professional finance
• syndicated loans and
• commodity finance
African Banking Corporation's International Banking team uses its
experience to provide clients with high level expertise in conducting
international banking transactions.
TREASURY
Our Treasury team is committed to providing world class service
in every sphere, both domestic and international by:
• providing a top quality and professional level of service in
both domestic and international financial markets;
• offering interest and exchange rates that are among the
most competitive in the market;
• being one of the market leaders in the development of new
financial products in the respective countries;
• supplying an impartial and expert advisory service; and
• building a close personal relationship with clients to obtain
a full understanding of their particular businesses in order
to tailor services that meet individual needs.
Products offered by Treasury division include
Domestic
• demand deposits
• call deposits
• forward rate arrangements
• Bills of Exchange, including Treasury Bills, Banker's
Acceptances, Accommodation Bills, Negotiable Certificates of
Deposit, Promissory Notes and Commercial Paper;
• capital markets instruments including government, municipal
and parastatal bonds; and
• other derivate products, including options on bonds and
index linked bonds
International
• demand deposits
• call deposits
• spot foreign exchange market transactions in major and
certain regional currencies;
• forward exchange rates
• currency options
• currency swaps
INVESTMENT BANKING
ABC’s Investment Banking division is committed to:
• delivering first class, independent professional advisory
services;
• establishing strong value- added partnerships by acquiring
an in- depth understanding of clients' businesses;

25. 24
• creating innovative financial structures to achieve clients' strategic
goals consistent with their cost and risk management objectives;
• effecting corporate restructurings with the objective of
reducing cost of borrowing and managing foreign exchange
risk in order to help create wealth for its clients;
• providing expert underwriting and placement capability for
equity and debt issues;
• raising long term capital on both corporate and project
finance basis;
• structuring privatizations to unlock value for Government,
create ownership opportunities for the public and private
productive assets in the hands of the private sector;
• establishing and maintaining relationships with major stockbrokers,
accounting and legal firms, as well as emerging market funds
and institutional and private investors; and
• employing and motivating professionals of the highest
calibre and integrity.
Advisory Services
• Debt and equity capital markets
• Private placements
• Privatisation
• Mergers, acquisitions and disposals
• Restructuring
• Project financing
• Infrastructure Finance
• Public-private partnership or private finance
• Mining finance
• Property Finance
• Securitisation
Investment Management Services
The Investment Management team advises and manages funds on
behalf of institutional and retail clients. We offer:
• Asset Management for institutions and corporations. This includes
exposure to equity, property, bond and money markets
• Ancillary support services - safe custody, dividends, cash
management and investment commentaries
• Portfolio Management
• Unit Trusts which include;
- Equity-based funds
- Cash-based Funds
- Property-based funds
Private Equity
Our Private equity team selectively makes investments in unlisted
businesses on a medium-term basis. In addition to acting as fund
manager for private equity funds invested by institutional clients,
the team may also identify proprietary investment opportunities
for the group.
STRUCTURED TRADE FINANCE
Our Structured Trade Finance unit creates tailor-made frameworks
to cater for clients’ requirements and needs outside normal banking
credit lines. Here the focus is on underlying transaction flows, rather
than balance sheet strength.
Whilst core trade products, such as negotiable instruments (e.g.
bills of exchange, promissory notes) and documentary credit (letters
of credit), still play a role in cross-border trade, our structured
Trade Finance Unit provides more sophisticated derivatives of
these products and risk-hedging instruments.
Types of financing includes back to back transactions, collateralized
management stock financing, avalised note discounting, structured
discounting facility, order finance and participation trade finance.

26. 25
Douglas Munatsi-Chief Executive Officer
Douglas Munatsi was born in Zimbabwe in 1962. He has been Chief Executive Officer of the ABC
Holdings Group since its formation in 2000. Prior to the establishment of African Banking
Corporation, Douglas founded Heritage Investment Bank (HIB), which quickly established a
reputation for successful introduction of innovative capital market products and became one of
the leading merchant banks in Zimbabwe. Following the merger of HIB and First Merchant Bank
in 1997, Douglas became Managing Director of the merged bank, which retained the First Merchant
Bank name. Prior to establishing HIB, Douglas Munatsi was an executive in the Southern Africa
regional mission of the International Finance Corporation (IFC). Before joining the IFC, he worked
at Barclays Bank in Zimbabwe.Douglas Munatsi holds a Bachelor of Business Studies degree from
the University of Zimbabwe and a Master of Business Administration (Finance) from the American
University, Washington D.C. He is also an Associate of the Institute of Bankers of Zimbabwe.
Beki Moyo-Chief Financial Officer
Beki Moyo was born in Zimbabwe in 1967. Prior to his current appointment, Beki held the
position of Head of Treasury and was an Executive Director of ABC Botswana. In the course
of a banking career spanning over 10 years, Beki also held the position of Finance Director of
ABC Zimbabwe, and was General Manager - Finance at udc, a predecessor entity of ABC
Holdings and Chief Accountant at Stanbic Bank Zimbabwe. Before entering banking, Beki Moyo
trained and qualified as a Chartered Accountant with Deloitte and Touché, where he was later
appointed Audit Manager. Beki Moyo holds a Bachelor of Accountancy (Honours) degree from
the University of Zimbabwe and a Master of Business Administration degree in Banking and
Finance from Manchester University. He is a Chartered Accountant (Zimbabwe).
Hashmon Matemera-Group Head of Treasury and Structured Finance
Hashmon Matemera was born in Zimbabwe in 1964. He has over 17 years‚ banking experience,
gained in merchant banking, commercial banking and as a central banker. Before being appointed
to his current position, Hashmon was Head of Structured Finance and an Executive Director of
Banking Services at ABC Zimbabwe. He also served as General Manager, Risk Management, at ABC
Zimbabwe and as Senior Manger, Risk Management at the Commercial Bank of Zimbabwe (CBZ).
Prior to joining CBZ, Hashmon spent 10 years at the Reserve Bank of Zimbabwe, mostly in the
Supervision and Surveillance Division, where he held the position of ManagerˆOffsite Supervision,
with responsibility for commercial and merchant banks. Hashmon Matemera holds a Bachelor
of Science (Honours) degree in Economics and a Master of Science in Economics, both from
the University of Zimbabwe.
Francis Dzanya-Chief Banking Officer
Francis Dzanya was born in Zimbabwe in 1960. Francis has over 20 years‚ experience in the
banking industry in Southern Africa, of which 10 years was in ABC Holdings and its predecessor
companies. Before assuming his current position, Francis Dzanya was Group Head of Corporate,
Private and International Banking and Managing Director of ABC Zimbabwe. Prior to the
formation of ABC Holdings in 2000, Francis was General Manager, Corporate, Private and
International Banking at First Merchant Bank, a predecessor entity of ABC Holdings. He also
held the position of General Manager, Risk Management at Heritage Investment Bank (HIB).
He also worked as a Branch Manager at Zimbabwe Banking Corporation in Zimbabwe and
Botswana. Francis Dzanya holds a Bachelor of Arts (Honours) degree in Banking, Insurance
and Finance from Sheffield Hallam University in the UK and Higher National Diploma in
Banking and Finance from John Moores University, also in the UK. He is an Associate of the
Chartered Institute of Bankers.
Julias Machapu-Chief Risk Officer
Julias Machapu was born in Zimbabwe in 1957. Before his appointment to his present post,
Julias was the Chief Financial Officer of ABC Holdings and Finance Director of its predecessor
entities, namely First Merchant Bank of Zimbabwe (FMB) and Heritage Investment Bank (HIB).
He also held senior finance positions in commerce and industry in Zimbabwe. Julias Machapu
holds a Bachelor of Accountancy degree from the University of Zimbabwe and is a Chartered
Accountant (Zimbabwe).
Markus de Klerk-Group Legal Counsel and Secretary to the Board
Markus de Klerk was born in Zimbabwe in 1966. Markus joined ABC Holdings Limited from
Phoenix Associates where he was a Consultant. Previously he was with Merchant Bank of Central
Africa Limited (MBCA), for a period of five years, where he held various posts in the Recoveries,
Risk Management and Company Secretariat Departments. When he left MBCA he joined Mitchell
& Mitchell Fresh Exports, as Group Legal Advisor and Company Secretary. Markus, an admitted
Attorney of Zimbabwe, has also practiced in a number of legal firms both in Zimbabwe and
South Africa. Markus holds a Bachelor of BA LLB from the Kwa Zulu- Natal University.

27. Shangaan
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26

28. RISK MANAGEMENT
Effective risk management is critical in a complex organization like ABC
Holdings Ltd (“ABCH”). A strong and solid risk management culture
exists that ensures that sound business decisions are made that properly
balance the diverse risks inherent in any transaction and the rewards.
A culture of risk awareness and compliance is embedded in ABCH’s
day to day activities.
Approach to Risk Management
The board of ABCH recognizes that it is ultimately responsible for, and
accountable to shareholders for:
• the process of risk management and the systems of internal control;
• identifying, evaluating and managing the significant risks faced by
the group ;
• ensuring that there is an adequate system of internal control in
place to mitigate the significant risks faced by the company to an
acceptable level;
• ensuring that there is a documented and tested process in place,
which allows the company to continue its critical business, processes
in the event of a disastrous incident impacting its activities;
• reviewing the system of internal control for effectiveness and efficacy;
As a banking group, risk identification and management is an integral
part of our business processes and must be a core competence of the
group. The Board has approved a risk framework which applies to all
group companies.
Risk management in the Group is underpinned by the following pillars.
• Governance Structures
The board has put in place a risk governance structure throughout
the Group which ensures effective oversight.
• Risk Ownership, Identification and Evaluation.
Ownership and management of risks begins in the business units
and each subsidiary. Risks are identified and evaluated at this
level, following through to the Holding Company and Group level.
• Group Risk Management Framework
The Group has a comprehensive risk management framework which
was approved by the board. The framework clearly documents the
risk management policies which are to be followed in the Group.
Group Risk Management is responsible for maintaining and updating
the risk management framework.
• Reporting
Each subsidiary or business unit produces risk reports which are
discussed at board level. Group risk provides detailed risk information
to the ABCH Board of Directors. The risk reports contain a balanced
assessment of significant risks and the effectiveness of risk manage-
ment procedures and what management is doing in managing
those risks
Risk Governance Structure
Role of Group Risk Management
The Group Risk function is responsible for the maintenance of a culture
of risk awareness throughout the group. While each business unit
retains the primary responsibility for managing its own risks, Group
Risk Management independently monitors, manages and reports on all
risks facing the Group as mandated by the Board of Directors. It co-
ordinates risk management activities across the group, ensuring that
risk parameters are properly set and adhered to across all risk categories
and in all of the group’s businesses. Group Risk ensures that all risk
exposures can be measured and effectively monitored across the group.
The effective management of risk was one of the key drivers for the
group’s investment in technology.
Group Risk Management continually seeks new ways to enhance its
risk management techniques. It also updates the Group Risk
27
Board of Directors
Group
Legal
Group
Compliance
Country Level
Functions
Group Internal
Audit
Executive
Committee
Chief Executive
Officer
Group Risk
Risk, Loans
Review and Audit
Committee

29. 28
Management Framework on a regular basis to capture new policies
adopted by the Board of directors.
Group Risk regularly reports to the Executive Committee and the Risk,
Loans Review and Audit Committee , providing the board with the
assurance that it requires that risks are being managed and controlled
in the Group.
The key role of Group Risk is recognized by ABCH and the function
is headed by a member of executive management who reports to the
Chief Executive Officer.
Group Internal Audit
The primary function of internal audit is to give an objective assurance
to the board that there are adequate management processes to identify
and monitor risks and that effective internal controls are in place to
manage those risks. Group Internal Audit independently audits and
evaluates the effectiveness of the Group’s risk management, internal
controls and governance processes.
Internal Audit operates under Terms of Reference which were approved
by the Risk, Loans Review and Audit Committee. The terms of reference
defines the role and objectives, authority and responsibility of the audit
function. The Group Internal Auditor reports to the Chief Executive
Officer and has unrestricted access to the Chairman of the Risk, Loans
Review and Audit Committee.
At the beginning of each financial year Internal Audit carries out risk
assessment for all business units and subsidiaries. A comprehensive
audit plan for the year is then derived based on this risk assessment
and identifies areas of focus. The areas of focus are confirmed with
executive management before they are approved by the Risk, Loans
Review and Audit Committee. The audit plan is reviewed regularly and
any changes are approved by the Risk, Loans Review and Audit
Committee.
Compliance
Compliance risk is the risk of non-compliance with all relevant regulatory
statutes, central bank supervisory requirements and industry code of
practice. The compliance function is an integral part of the overall
Group Risk Management function. A decentralized compliance function
has been implemented within the business units and subsidiaries.
Compliance officers have been appointed in each operating entity.
Compliance risk is managed effectively through the development and
implementation of compliance processes, development of effective
policies and procedures affecting the respective regulatory framework,
provide advice and training on the constantly changing regulatory
issues. A key role of compliance officers in the Group is to develop
and maintain sound and smooth working relationships with the various
regulators throughout the countries in which ABCH has operations.
Group Legal
The function is headed by the Group General Counsel and is responsible
for ensuring that legal risk is adequately managed. This is effected
through the use of standard approved legal documentation wherever
possible. Specialised external legal advisors are used whenever required
for non-standard transactions. The Group General Counsel ensures that
only approved legal advisors are used to give legal opinions or to draw
up specialized agreements.
The main categories of risk inherent in the business of the group are:
Credit Risk
Liquidity Risk
Interest Rate Risk
Market Risk
Currency Risk
Operational Risk
Solvency Risk
Reputational Risk
Credit Risk is the risk of loss due to the inability or unwillingness of
a particular counterparty to meet their obligations. Country (or Sovereign)
risk is part of overall credit risk and is managed as part of the credit
risk management function as it has a major impact on individual
counterparties ability to perform.

30. 29
The Board has defined and documented a credit policy for the group
which forms the basis of credit decisions. This policy includes a
framework of limits and delegation of credit approval authority which
are strictly adhered to. No one individual has the power to authorize
credit exposures.
Each country in which the group operates has a credit committee which
operates within the defined limits set by the Board. These committees
are responsible for the management of credit risk within their country
including, credit decisions, processes, legal and documentation risk
and compliance with provisioning policies.
The Risk department regularly reviews each country’s adherence to
required standards.
The Regional Credit committee reports through Exco to the Board and
is responsible for approval of credit decisions that are above country
limits, recommendations on exposure limits and provisioning policies.
The group has adopted standard provisioning policies which at a
minimum comply with the prudential guidelines of the respective
countries’ central banks. Provisions are determined monthly at country
level and are subject to regular review by Group Risk. On a bi-annual
basis the levels of provisions are reviewed by external auditors.
Liquidity Risk is the risk that the group may not be able to meet its
commitments due to a shortage of funds that normally arises as a result
of maturity mismatch between assets and liabilities. Interest Rate Risk
is the risk of incurring losses as a result of a change in interest rates
that arises when assets and liabilities reprice at different times.
The Assets and Liabilities Management committee (ALCO) is responsible
for managing liquidity and interest rate risk in the group. ALCO
committees have been established in each country and meet on a
monthly basis. They operate within the prudential guidelines and
policies established by Group ALCO.
The group has adopted a conservative approach to liquidity risk
exceeding statutory requirements. It holds liquidity reserves in highly
tradeable instruments or money market placements which are
immediately available if required. Liquidity is assessed by currency
as well as by time bracket. Group liquidity management is dependent
upon accurate cash flow projections and the monitoring of it’s future
funding requirements.
In order to reduce interest rate risk, the majority of the group’s lendings
are on a variable interest rate with a term of less than one year. This
approach has been adopted as a result of the scarcity of term deposits
in the region which limits the group’s ability to build a substantial,
stable pool of fixed rate funding.
Market Risk is the risk that adverse changes in the market value of a
portfolio of financial instruments (including derivatives) may result in
losses to the group. Currency Risk is the risk of adverse movements
in exchange rates resulting in a loss to the group.
Market and foreign currency exposures related to dealing positions are
housed and managed in the Treasury division within a framework of
pre-approved dealer, currency and counterparty limits. All trading
positions are marked to market as required by IAS39.
The Group Risk division is responsible for monitoring of limits and
pricing, thereby ensuring that any errors or unauthorized transactions
are promptly identified.
The currency exposure that arises as a result of the group’s continuing
expansion and cross border investment activities is managed through
Regional Credit Committee and Group ALCO.
Operational Risk is the risk of loss due to inadequate, or breakdowns
in, internal processes, systems, and people as well as the effect of
external events. It includes reputational risk and technology risk.
The group tries to mitigate these risks through strong corporate
governance structures and internal control systems, complimented
by a healthy culture system.

31. 30
The Risk, Loans Review and Audit committee is responsible for
monitoring operational risk, reputational risk and other risks not managed
by separate committees. However management throughout the
organization is responsible for introducing and maintaining effective
operational processes and procedures. They are the front line in
managing operational risk.
Effective compliance and internal audit functions are a critical part
of the governance activities relating to operating risk. Compliance
officers have been appointed in each jurisdiction although in countries
where businesses are still small, the compliance and risk functions
have been combined.
The internal audit function operates centrally, but visits each
region several times per year. This modus operandi also
increases internal audit’s independence from regional
operations. Internal audit reviews the efficacy of internal
controls and procedures, recommending improvements to
management where applicable.
The governance of technology issues was given particular
attention in King II and the IT Steering Committee has wide
representation from business areas and meets regularly to
address policy issues.
Solvency Risk
The level of capital and unimpaired reserves are evidence of the
shareholder’s commitment to ensuring the continuing operations and
solvency of the group.
Solvency risk is measured by the capital adequacy ratio which requires
capital to be held in relation to risk weighted asset classifications. The
group is committed to holding sufficient capital to meet both the
capital requirements at a consolidated level and to maintain capital
adequacy levels at a country level that are above the minimum
requirements of the respective central banks.
Reputational Risk is managed through adherence to corporate governance
standards, the Group’s business integrity policy and corporate values.
CORPORATE GOVERNANCE
ABC Holdings Ltd (ABCH) is committed to the principles of openness,
integrity and accountability. In February 2003, the board endorsed
the adoption of the second report of the King Commission.
Board of Directors
The board currently comprises 7 directors, including 5 independent
non-executive directors, 1 non-executive director and 1 executive
director. The board composition is balanced so that no one individual
or small group can dominate decision making. The depth of experience
and diversity of the board ensures that robust and forthright debate
on all issues of material importance to the group occurs. ABCH Director’s
profiles may be found on page 12 of this report
The roles of Chairman and CEO are separate and no individual has
unfettered control over decision making. The chairman is a non-
executive director appointed by the board.
The board is responsible to shareholders for setting of strategic direction,
monitoring of operational performance and management, risk
management processes and policies, compliance and setting of authority
levels as well as the selection of new directors. The board is also
responsible for the integrity and quality of communication with
stakeholders, including employees, regulators and shareholders. The
Board has adopted a Risk Management Framework and has delegated
its responsibility for risk to the Risk, Loans Review and Audit Committee.
This committee reviews risk management processes in the Group and
ensures that board policies and decisions on risk are properly
implemented. The committee assesses the adequacy and effectiveness
of the risk management structures in the group and report to the board
on all risk governance issues.
All directors have direct access to the advice and service of the company
secretary and to information on the group’s affairs. A formal board
charter has been adopted which deals with board’s role, responsibility
and procedures.

32. 31
Country operations have their own boards, with external representation
and function within the requirements of their jurisdiction.
The ABCH board meets at least quarterly. During the past financial
year it met 4 times, and held several additional telephonic meetings. The
CEO and senior executives are available to brief directors where required.
Director’s attendance at meetings in 2005.
Board Committees
The board is assisted in the discharge of its responsibilities by a number
of sub-committees. A pictorial representation of the governance structure
can be found on page 17.
These committees are accountable to the board, with the exception of
the management committee which reports to the executive committee.
Minutes of sub-committee meetings are circulated and reported on at
the following board meeting. Senior executives are invited to attend
meetings where appropriate.
Board committees may make use of external professional advisers,
when necessary, to discharge specific tasks.
Executive Committee
The Executive Committee (EXCO) is constituted to assist the chief executive
in managing the group and implementing strategy, policies and procedures
subject to the board’s limitations on delegation to the chief executive.
The chief executive’s authority in managing the group is unrestricted.
EXCO assists the chief executive to guide and control the overall
direction of the business of the group and acts as a medium of communication
and co-ordination between business units and group companies, and the
board. EXCO meets monthly and is supported by a management committee
comprising of all divisional and functional heads which meets weekly. EXCO
consists of 2 non-executive directors and 2 executives.
The committee also considers non-remuneration aspects of human resources
such as succession planning and skills development within the Group.
Risk , Loans Review and Audit Committee
The audit committee is chaired by Mr N. Kudenga, an independent
non-executive director of ABCH. The audit committee has adopted the
Terms of References for both the Risk Committee and Audit Committee
as detailed in the King II report. In particular it assists the board in
the discharge of its duties relating to financial reporting to all
stakeholders, compliance, risk management, loans review and the
effectiveness of accounting and management information systems.
Meetings are held regularly throughout the year and are attended by
external and internal auditors as well as senior executive management.
The committee met four times in 2005. Issues addressed include the
review of accounting policies, internal and external audit functions,
IT risks, business continuity planning, financial reporting, operational
risks, risk management, capital adequacy, compliance and the adequacy
of management information. Detailed loans information and all arrears
are considered by the committee together with the adequacy of the
bad debt provisions.
The committee considered whether the company and the group are
going concerns and recommended that the board endorse a statement
to this effect and that the financial statements prepared on this basis
should be approved.
Remuneration committee
The remuneration committee is chaired by Mr. O M Chidawu, a non-
executive director of ABCH. The CEO attends the meetings of this
committee by invitation but does not participate in any discussions on
his remuneration. The committee is responsible for the senior executive
February June August December
Barry Y N N N
Buttery Y Y Y Y
Chidawu Y Y Y Y
Hug Y Y n/a n/a
Kudenga Y Y Y Y
Mbaakanyi Y N Y Y
Mothibatsela n/a n/a Y Y
Munatsi Y Y Y Y
Wasmus Y Y Y Y

33. 32
remuneration policy . It fixes the remuneration packages of individual
directors within agreed terms of reference, in order to avoid potential
conflicts of interest.
The remuneration committee is responsible for setting the remuneration
philosophy of the group. It aims to ensure that the financial rewards
offered by the company to employees are sufficient to attract people
of the calibre required for effective running of the company and to
produce the required returns to its shareholders. Annually the committee
reviews the profit sharing scheme which is based on achievement of a
specified return to shareholders. The committee met four times in 2005.
Nominations Committee
The Nomination Committee comprises two non-executive directors and
is responsible for making recommendations to the board on all new
board appointments. A formal process is in place in terms of which
the skills needed are identified and those individuals who might best
assist the board in their endeavours are recruited. During the year Mr.
Tsipa Samuel Mothibatsela was appointed to the board. In terms of
the memorandum and articles, the longest serving one third of directors
retire by rotation annually and stand for re-election. Messrs. Buttery,
Chidawu, and Kudenga will retire at the AGM to be held in May 2006,
and being eligible, will stand for re-election. Resumes of directors
standing for re-election are given on page 76.
Organisational Ethics and Business Integrity
The need for the organization to act professionally at all times is
enshrined in the Group’s mission statement. Good governance and
ethical conduct is critical to counterparty and investor perceptions of
a banking group, particularly in Africa. Professional and ethical conduct
is an integral part of how the Group conducts its business on a daily
basis and the Group strives to ensure that its integrity and professional
conduct is beyond reproach at all times. Every six months each
employee’s performance is measured against set targets. Leadership
development programmes are in place to ensure that ethical conduct
is an integral part of the business culture. While it is probably impossible
to achieve a perfect result, we attempt to limit the cost of unethical
behaviour to our stakeholders.
The group has adopted a business integrity policy which comprehensively
deals with issues such as money laundering, insider trading, bribery,
political activities, confidentiality and data privacy as well as whistle
blowing. ABCH adopts a firm approach in dealing with any inappropriate
or fraudulent behaviour of management or staff at any level. Our
policies and procedures are being constantly improved to prevent
possible future losses in this critical area.
Directors and Executives disclose any material interests they may have
and recuse themselves from participating in discussions on credit or
other proposals relating to their interests.
Dealing on Stock Exchanges
As part of its commitment to conducting business in a professional
and ethical manner at all time times, the Group follows strict guidelines
in respect of dealing on the Stock Exchanges by employees and
directors. A policy is in place prohibiting directors and employees in
dealing in stocks when they are in possession of price-sensitive
information, which may generally not be available to the public. Dealing
is further restricted in dealing in ABCH’s shares and other related
counters during defined periods which are generally six weeks prior to
the publication of the interim and final results
Health and Safety Policy
ABCH seeks to ensure that it engages in activities which do not
jeopardise the health and safety of its employees, taking into account
the industrial sectors concerned. ABCH will encourage businesses
supported by it to adopt appropriate health and safety measures
and endeavour to comply, within a reasonable period, with local
legislative requirements, as far as occupational health and safety
is concerned.
Environmental Policy
ABCH recognises that environmental risks should be part of the normal
checklist of risk assessment and management. As part of ABCH’’s
credit risk assessment, it seeks to ensure that the environmental effects
of its support are assessed and monitored in the planning, implementation
and operational stages of a project

34. 33
African Banking Corporation Holding (ABCH) is a responsible corporate
citizen and it invests in, among others, the children and women of
Africa. The group seeks to support projects that help to build for the
future of Africa. The projects are varied but are all focused on upliftment
of women and the promotion of well-rounded African children.
Furthermore the thrust is on the development of the African heritage
and this is achieved through the promotion of arts, dance, song language
and rituals that are distinctively African.
Children
In 2005, the bank continued with its focus on caring for children particularly,
AIDS orphans. African Banking Corporation Zambia Limited (ABCZ)
partnered with Our Ladies Hospice. The Hospice is an NGO run by
volunteers and it caters for HIV/AIDS patients. The hospice is also used
as a counseling and a Voluntary Testing Centre. It is situated in Kalingalinga
Township, Lusaka.
Zambia, as is the case with the rest of the world, has been impacted
by the adverse effects of HIV/AIDS and hence ABCZ felt the need to
partner with the hospice. The services offered by the Hospice are
contributing towards the awareness and the well being of the community
and its development.
In Zimbabwe, the bank donated money to St Paul’s Mission Hospital,
which caters for 20 children from birth to age fourteen. The donation
was aimed at providing entertainment for the children. Many of the
children in hospital are not only in pain because of the diseases
affecting them, but also because of loneliness and the sad reality of
being away from home and families. Hence the bank chose to purchase
television sets, toys and books to keep them entertained.
The bank continued its sponsorship in the area of education through
the support of disabled students at the University of Zimbabwe and
various donations throughout schools regionally. In Tanzania, the bank
donated computers to Kilimanjaro Development Forum a Non-Governmental
Organisation promoting economic and educational development.
Women
African Banking Corporation Botswana Limited (ABCB) participated in the
Breast Cancer Association initiative and was also involved in a march against
the rising incidents of murders and suicides called “Passion Killings.” The
bank also funded a women institution involved in knitting and selling of
garments for the deaf, blind and mentally challenged children in Francistown.
Arts and Culture
On the cultural area the bank continued with the sponsorship of The
Harare International Film Festival of the Arts through the sponsorship
of the opening night concert, running the HIFA ticket box and also the
branding of the African Banking Corporation -7 Arts theatre. The
opening concert, “What about You” featured Afro tenors, a group of
three South Africans, Oliver Mutukudzi, Chitungwiza Harmony Singers,
Sontonga String Quartet, Air Power, Zim Zim Acrobats to mention a
few. The show combined both song and dance.
Community Initiatives
African Banking Corporation Zimbabwe Limited, (ABCZ) partnered with
the Zimbabwe Republic Police (ZRP) in the preservation of order and
the provision of peace of mind.
On realising that the Zimbabwe Republic Police was operating under
strenuous conditions and was not fully equipped to provide the protection
that the community expected due to lack of resources, African Banking
Corporation decided to help. On carrying out an audit the bank
identified a number of resources that it could provide. Firstly, the
bank realised the importance of efficient and reliable communication
and provided computers and telephones handsets for stations in Harare,
Bulawayo, Mutare and Chinhoyi.
The bank also donated eight motorcycles to be used throughout the
country to ensure accessibility to some remote areas and ensure quick
response to crime prevention.
The bank also embarked on a project to spruce up the image of the
Police stations and started with Borrowdale and Mbare police stations
in Harare where it painted the buildings, tiled the floors in the charge
offices and provided reception chairs for the clients. In Bulawayo, the
bank adopted the Bulawayo Central and West Commonage Police
station. The bank supported the Mutare Central Police Station and the
Chinhoyi Central Police Station.
The group continued to support many other community related projects
and it is through this support that the bank aims to establish a strong
Pan-African brand.

35. Moroccan
couscous
platter/Swisscheese
34

36. 35
Directors’ Responsibility 36
Report of the Independent Auditors 37
Directors’ Report 38
Consolidated Profit and Loss Account 40
Consolidated Balance Sheet 41
Company Balance Sheet and Profit & Loss 42
Statement of Changes in Shareholders’ Equity 43
Consolidated Cashflow Statement 44
Significant Accounting Policies 46
Notes to the Financial Statements 50

37. Responsibility for the Annual Financial Statements
The directors are responsible for the preparation, integrity and objectivity
of the financial statements that fairly present the state of the affairs
of the company and of the group at the end of the financial year and
the net income and cash flow for the year, and other information
contained in this annual report.
To enable the directors to meet these responsibilities:
• The board and management set standards and management
implements systems of internal control and accounting and
information systems aimed at providing reasonable assurance that
assets are safeguarded and the risk of error, fraud or loss is reduced
in a cost effective manner – these controls, contained in established
policies and procedures, include the proper delegation of
responsibilities and authorities, effective accounting procedures
and adequate segregation of duties;
• The group’s internal audit function, which operates independently
from operational management and unimpeded, and has unrestricted
access to the Group Audit and Risk Committee, appraises, evaluates
and, when necessary, recommends improvements in the systems
of internal control and accounting practices, based on audit plans
that take cognizance of the relative degrees of risk of each function
and internal control, accounting policies, reporting and disclosure; and
• The Group Audit and Risk Committee, together with the external
auditors, play an integral role in matters relating to financial and
internal control, accounting policies, reporting and disclosure.
The annual financial statements have been prepared in accordance
with the provisions of the Botswana Companies Act, the Botswana
Stock Exchange Regulations and International Financial Reporting
Standards relating to companies and banks.
The directors have no reason to believe that the group or any subsidiary
company within the group will not be going concerns in the year ahead,
based on the forecasts and available cash resource. These financial
statements have accordingly been prepared on that basis.
It is the responsibility of the independent auditors to report on financial
statements. Their report to the members of the Company is set out on
page 37 of this annual report.
Approval of the Annual Financial Statements
The directors’ report and the annual financial statements, which appear
on pages 38 to 73, were approved by the Board of directors on 28
February 2006 and are signed by:
O M CHIDAWU D T MUNATSI
CHAIRMAN CHIEF EXECUTIVE OFFICER
36

38. 37

39. Nature of Business
ABC Holdings Limited is listed on the Botswana and Zimbabwe Stock exchanges and is the holding company of the African Banking Corporation
group of companies which comprise diverse financial services activities in the areas of corporate, international, investment and merchant banking,
leasing finance, asset management, stock broking and treasury services. African Banking Corporation aims to deliver world-class financial solutions
to the sub-Saharan African region.
Authorised and issued Share Capital
Details of the share capital are set out in note 16 to the financial statements. There was no change in the authorized or issued share capital of
the company during the year.
Group Results
Inflation adjusted headline earnings amounted to BWP 18 million and headline earnings per share to 17.8 thebe. On a historical cost basis, the
group posted headline earnings profit of BWP60.8 million compared to BWP36.0 million achieved in the prior year and headline earnings per share
of 53.6 thebe. Headline earnings were derived principally from the group’s banking activities with the Zimbabwe operations contributing 77% of
the earnings. Group profits attributable to ordinary shareholders amounted to BWP 17.1 million on an inflation-adjusted basis and BWP 57.7
million on a historical cost basis
A general review of the business and operations of major subsidiaries is given in the Chief Executive Officer’s review on pages 19 to 21 of this
annual report.
The financial statements have been prepared in accordance with International Financial Reporting Standards and the accounting policies of the
group, which are considered by the directors to be appropriate. Accounting policies have been applied in a manner consistent with that in the
previous financial year and details of significant policies can be found on pages 46 to 49.
Subsidiary and Associated Companies
Details of the groups’ subsidiaries and associated companies are set out in note 34 of this annual report.
Acquisitions and disposals
During the financial year, the company made no material acquisitions or disposals. However discussions to exit Iroko Financial Products Limited
are at an advanced stage and the net assets of Iroko have been classified as assets available-for-sale, which assets have been fully impaired.
Directors’ Interests in the shares of ABC Holdings Limited
Directors held no direct shareholding interests in ABC Holdings Limited. The following table depicts the interests of Directors in the shares of ABC
Holdings Limited. These interests are indirect and beneficial.
38
INDIRECT, BENEFICIAL NUMBER OF SHARES AS AT NUMBER OF SHARES AS AT
SHAREHOLDING 31 DECEMBER 2005 31 DECEMBER 2004
O.M. Chidawu 13,006,966 13,280,852
N. Kudenga 304,008 304,008
D.T. Munatsi 11,764,517 12,213,602

40. 39
Directors’ interests in transactions
Any interests by Directors in transactions between the company and third parties were disclosed to committees that were responsible for approval
prior to such approval being granted and interested parties are required to recuse themselves from any approval process. Details of lending exposures
can be found in the note on related party transactions on page 64 of this report.
Directors Emoluments
Directors’ emoluments in respect of the company’s directors (Executive and Non-Executive) are shown in note 5.2 to the financial statements.
The earnings and perquisites of the Group Chief Executive Officer are approved by the Remuneration Committee of the Board.
Directors and Secretaries
Full details of the directorate are shown on page 14. Details of the secretary are given on page 15.
The following resignations and appointments occurred during the current year:
Mr RW Hug resigned from the board on 1 June 2005 and Mr T Mothibatsela was appointed to the board on 9 August 2005.
Subsequent to the year-end Mr TC Barry resigned from the board because of pressures elsewhere in his business.
The following directors retire by rotation at the Annual General Meeting to be held on 30 May 2006:
Messrs H J Buttery, O M Chidawu, N Kudenga
Brief CVs of Directors eligible and available for re-election at the Annual General Meeting are included in Notice to Shareholders.
Dividends
The Directors have recommended that a final dividend for the current year be passed as capital requirements have been increased in a number of jurisdiction
that we operate in. With the Group’s financial position strengthening, the board would like to return to paying a dividend in line with the company’s policy.
A 10% preference share coupon, as approved by the ordinary shareholders at the Annual General Meeting in 2002, was paid to Preference Shareholders.
Insurance
ABC Holdings Limited and its subsidiaries are insured against banking risks, asset losses, professional indemnity and Directors and officers’ claims
at a level of cover, which is considered to be adequate by the directors.
Post-balance sheet events
Subsequent to the balance sheet date, the preference shareholders’ agreement was terminated by mutual consent. In terms of the restructuring
agreement, the preference shareholders will convert 30% of their redeemable preference shares to ordinary equity. The balance of 70% will be
redeemed in two equal installments with the final installment being due and payable by September 2006. No adjustment has been made in the
consolidated financial statements.
M de Klerk
Secretary to the Board
28 February 2006

41. 40
ABC Holdings Limited
Interest and similar income
Interest expense and similar charges
Net interest income
Impairment of loans and advances
Income from lending activities
Other income
Income from associates and joint venture
Total operating income
Operating expenditure
Loss on net monetary position
Net operating income
Exceptional items
Impairment of goodwill
Impairment of Iroko investment
Recovery of impaired loan book
Profit before taxation
Taxation
Profit for the year
Attributable to:
Equity holders of parent
Minority interest
Profit for the year
Earnings per share
Basic earnings per share
Headline earnings per share
Consolidated profit and loss account for the year ended 31 December 2005
438,955 456,194 322,041 365,967
(268,991) (332,005) (195,959) (262,920)
1 169,964 124,189 126,082 103,047
2 (20,728) (25,638) (20,728) (25,638)
149,236 98,551 105,354 77,409
3 164,521 169,820 144,806 138,830
4 4,209 3,857 4,209 3,857
317,966 272,228 254,369 220,096
5 (189,272) (176,074) (151,825) (152,621)
(62,581) (33,726) - -
66,113 62,428 102,544 67,475
(9,552) (1,733) (9,552) (1,733)
6 (17,133) (1,733) (17,133) (1,733)
35 (5,093) - (5,093) -
12,674 - 12,674 -
56,561 60,695 92,992 65,742
7 (38,453) (35,783) (34,221) (25,866)
18,108 24,912 58,771 39,876
17,082 30,498 57,745 45,462
1,026 (5,586) 1,026 (5,586)
18,108 24,912 58,771 39,876
8 Thebe Thebe Thebe Thebe
8.1 15.1 26.9 50.9 40.1
8.2 17.8 18.5 53.6 31.7
Inflation Adjusted Historical Cost
2005 2004 2005 2004
Notes BWP '000s BWP '000s BWP '000s BWP '000s

42. 41
ABC Holdings Limited
ASSETS
Cash and cash equivalents
Financial assets held for trading
Investments
Investment in associates and joint venture
Loans and advances to customers
Customer liabilities for acceptances
Other assets
Deferred tax assets
Investment property
Property and equipment
Goodwill
Total assets
LIABILITIES
Deposits
Other interest- bearing liabilities
Repurchase agreements
Liability for acceptances
Current tax liabilities
Deferred tax liability
Preference share liability
Other liabilities
Total liabilities
SHAREHOLDERS' EQUITY
Share capital and premium
Foreign currency translation reserve
Capital and other reserves
Retained earnings
Total equity attributable to equity holders of parent
Minority interest
Total shareholders' equity
Total shareholders' equity and liabilities
Consolidated balance sheet as at 31 December 2005
9 207,304 287,846 207,304 287,846
10 861,202 548,954 861,202 548,954
11 34,901 61,004 34,901 61,004
34,467 28,572 34,467 28,572
12 662,795 662,222 662,795 662,222
2,983 27,143 2,983 27,143
15 17,577 38,591 17,577 38,591
25 8,441 6,982 8,441 6,982
14 10,811 16,770 10,811 16,770
13 40,875 68,683 27,196 34,058
6 34,467 47,185 34,467 47,185
1,915,823 1,793,952 1,902,144 1,759,327
22 1,338,826 1,147,949 1,338,826 1,147,949
23 102,950 130,820 102,950 130,820
73,560 74,292 73,560 74,292
2,983 27,143 2,983 27,143
10,187 24,369 10,187 24,369
25 20,305 16,875 16,073 6,225
17 115,056 89,240 115,056 89,240
24 44,330 75,594 44,330 75,594
1,708,197 1,586,282 1,703,965 1,575,632
16 225,205 225,205 225,205 225,205
18 (28,386) (4,442) (253,712) (202,501)
19 19,119 18,278 24,503 18,278
20 (21,464) (42,400) 189,031 131,684
194,474 196,641 185,027 172,666
21 13,152 11,029 13,152 11,029
207,626 207,670 198,179 183,695
1,915,823 1,793,952 1,902,144 1,759,327
Inflation Adjusted Historical Cost
2005 2004 2005 2004
Notes BWP '000s BWP '000s BWP '000s BWP '000s

43. 42
ABC Holdings Limited
ASSETS
Cash and cash equivalents
Investment in subsidiaries
Investments
Other assets
Deferred tax assets
Total assets
Inter-company balances
Current tax liabilities
Preference share liability
Other liabilities
Total liabilities
SHAREHOLDERS' EQUITY
Share capital and premium
Foreign currency translation reserve
Retained earnings
Total shareholders' equity
Total shareholders' equity and liabilities
Company balance sheet as at 31 December 2005
- 2,524
34 362,512 362,512
729 566
929 2,220
97 119
364,267 367,941
18,221 14,812
- 916
17 115,056 89,240
7,287 7,470
140,564 112,438
16 226,898 226,898
(7,599) 23,406
4,404 5,199
223,703 255,503
364,267 367,941
Historical Cost
2005 2004
Notes BWP '000s BWP '000s
Interest and similar income
Interest expense and similar charges
Net interest loss
Impairment of loans and advances
Other income
Total operating income
Operating expenditure
Profit before tax
Taxation
Loss for the year
Company profit and loss for the ended 31 December 2005
2,344 967
(12,598) (9,545)
(10,254) (8,578)
- (6,630)
(10,254) (15,208)
16,643 23,027
6,389 7,819
(5,395) (5,866)
994 1,953
(1,787) (3,888)
(793) (1,935)
Historical Cost
2005 2004
Notes BWP '000s BWP '000s

44. 43
ABC Holdings Limited
Balance at 1 January 2004
Net profit for the year
Reserve transfers
Reserve created
Foreign currency translation movement
Recognised as treasury shares
Balance at 31 December 2004
Net profit for the year
Reserve transfers
Reserve created
Foreign currency translation movement
Negative goodwill recognised
Balance at 31 December 2005
Statement of changes in shareholders' equity for the year ended 31 December 2005
5,672 221,226 (15,593) 952 7,600 (68,260) 151,597 21,740 173,337
30,498 30,498 (5,586) 24,912
2,531 (952) 3,059 (4,638) - -
1,084 6,535 7,619 7,619
8,620 8,620 (5,125) 3,495
(1,693) (1,693) (1,693)
3,979 221,226 (4,442) 1,084 17,194 (42,400) 196,641 11,029 207,670
17,082 17,082 1,026 18,108
561 (561) - -
280 280 280
(23,944) (23,944) 1,097 (22,847)
4,415 4,415 4,415
3,979 221,226 (28,386) 1,364 17,755 (21,464) 194,474 13,152 207,626
Share Share Foreign Available Capital Revenue Total Minority Total
Capital Premium Currency For Sale Reserve Reserves Interests Equity
Translation Reserve
Reserve
BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s
Inflation Adjusted
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Balance at 1 January 2004
Net profit for the year
Reserve transfers
Reserve created
Foreign currency translation movement
Recognised as treasury shares
Balance at 31 December 2004
Net profit for the year
Reserve transfers
Reserve created
Foreign currency translation movement
Negative goodwill recognised
Balance at 31 December 2005
5,672 221,226 (186,538) 952 7,600 88,329 137,241 21,740 158,981
45,462 45,462 (5,586) 39,876
(952) 3,059 (2,107) - -
1,084 6,535 7,619 - 7,619
(15,963) (15,963) (5,125) (21,088)
(1,693) (1,693) - (1,693)
3,979 221,226 (202,501) 1,084 17,194 131,684 172,666 11,029 183,695
57,745 57,745 1,026 58,771
4,813 (4,813) - -
280 1,132 1,412 1,412
(51,211) (51,211) 1,097 (50,114)
4,415 4,415 4,415
3,979 221,226 (253,712) 1,364 23,139 189,031 185,027 13,152 198,179
Share Share Foreign Available Capital Revenue Total Minority Total
Capital Premium Currency For Sale Reserve Reserves Interests Equity
Translation Reserve
Reserve
BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s BWP'000s
Historical Cost
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

45. ABC Holdings Limited
CASH FLOWS FROM OPERATING ACTIVITIES
Cash available from operating activities
Taxation paid
Net cash inflow from operating activities
Net decrease in operating funds
Increase in loans and advances to customers and other assets
Increase in deposits and other liabilities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
Proceeds on disposal of property and equipment
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange adjustment on opening balance
Cash and cash equivalents at the end of the year
Consolidated cashflow statement for the year ended 31 December 2005
1 170,007 123,079 133,681 82,704
(50,664) (17,307) (40,014) (11,954)
119,343 105,772 93,667 70,750
(114,775) (93,156) (114,775) (108,866)
(247,441) (297,217) (247,441) (312,927)
132,666 204,061 132,666 204,061
(4,652) (8,550) (4,176) (8,489)
(5,862) (8,730) (5,386) (8,669)
1,210 180 1,210 180
- - - -
(84) 4,066 (25,284) (46,605)
287,846 317,937 287,846 317,937
(80,458) (34,157) (55,258) 16,514
9 207,304 287,846 207,304 287,846
Inflation Adjusted Historical Cost
2005 2004 2005 2004
Notes BWP '000s BWP '000s BWP '000s BWP '000s
44

46. 45
ABC Holdings Limited
1 Reconciliation of operating profit to cash flows from operating activities
Profit before taxation
Adjusted for:
Depreciation
(Profit)/loss on sale of property & equipment
Impairment of loans and advances (net of recoveries)
Loss on net monetary position
Impairment of Iroko investment
Goodwill impairment
Property revaluation gains
Other impairment losses
Cashflows from operating activities
Consolidated cashflow statement for the year ended 31 December 2005
56,561 60,695 92,992 65,742
15,961 19,935 5,785 8,239
(516) 40 (516) 40
21,991 21,811 21,991 21,811
62,581 33,726 - -
5,093 - 5,093 -
17,133 1,733 17,133 1,733
(9,290) (15,901) (9,290) (15,901)
493 1,040 493 1,040
170,007 123,079 133,681 82,704
Inflation Adjusted Historical Cost
2005 2004 2005 2004
Notes BWP '000s BWP '000s BWP '000s BWP '000s